Tag: slips

Interest rate futures markets are pricing in no further U.S. rate hikes in 2019. The euro gained 0.1 percent on the greenback to $1.1485, while the Canadian dollar strengthened by 0.15 percent to C$1.3270. But other analysts expect the pound will take a major beating if May loses the vote by a wide margin. “Losing by 100 or more votes is a major defeat but there’s some talk that she could lose by 200 votes. Elsewhere, the Australian dollar and kiwi dollar, both considered proxies for global risk

The dollar weakened on Tuesday on heightened expectations the Federal Reserve will hold off on raising rates this year due to a slowdown in global growth, while sterling edged up ahead of Britain’s parliamentary vote on its Brexit plan.

Worries over the U.S. economy losing steam as well as a shock contraction in Chinese trade have fanned worries about a sharp global slowdown, which will likely keep the Fed from tightening monetary policy further this year.

The dollar index weakened by 0.12 percent to 95.48.

“There is a strong dislike for the dollar given Fed expectations, but at the same time there is not a compelling replacement,” said Sim Moh Siong, currency strategist at Bank of Singapore. “Over the next 6-12 months, the dollar should trend lower.”

Interest rate futures markets are pricing in no further U.S. rate hikes in 2019.

Fed Chairman Jerome Powell said last week the U.S. central bank has the ability to be patient on monetary policy given that inflation remains stable.

The euro gained 0.1 percent on the greenback to $1.1485, while the Canadian dollar strengthened by 0.15 percent to C$1.3270.

Sterling will be in focus as British Prime Minister Theresa May must win a vote in parliament later on Tuesday to get her Brexit deal approved or risk a chaotic exit for Britain from the European Union. The numbers are not in May’s favour and her chances of winning the vote look extremely slim. May needs to secure 318 votes to win.

Sterling gained 0.3 percent to $1.2901 ahead of the vote.

“Interestingly, speculators have been betting that this outcome could lead to a possible delay to Brexit from 29 March to July (after the EU Parliament elections in May) to allow for fresh elections or a second referendum,” Philip Wee, currency strategist at DBS, said in a note.

But other analysts expect the pound will take a major beating if May loses the vote by a wide margin.

“Losing by 100 or more votes is a major defeat but there’s some talk that she could lose by 200 votes. A major loss will lead to a knee jerk decline in GBP that could take GBP/USD below 1.25 and EUR/GBP above 91 cents,” said Kathy Lien, managing director of currency strategy at BK Asset Management in a note.

Elsewhere, the Australian dollar and kiwi dollar, both considered proxies for global risk appetite, were up 0.2 percent each, having recovered from Monday’s lows.

Sentiment was aided by a fresh round of commitments from Chinese policymakers to stimulate their economy though fiscal and monetary steps.

The Aussie was at $0.7213, while the kiwi dollar fetched $0.6833.

The Aussie dollar has stabilized above the $0.72 level and most analysts think it points to Chinese growth likely bottoming out in the next few quarters.

Given the sharp slowdown in economic activity and the negative impact of the U.S.-Sino trade dispute on the Chinese economy, analysts are hopeful that leaders of the two countries will reach a comprehensive trade deal in the coming weeks.

Trade tensions between the world’s two largest economies had rattled financial markets for most of last year.

U.S. West Texas Intermediate (WTI) crude futures dropped 7 cents, or 0.1 percent, to $52.52 per barrel. Despite Friday’s price falls, Brent and WTI are set for weekly gains of more than 7 and 8 percent respectively. A key reason for the emerging glut was the United States where crude oil production soared by more than 2 million barrels per day (bpd) in 2018 to a record 11.7 million bpd. Consultancy JBC Energy this week said it was likely that U.S. crude oil production was already “significantly

Traders said the declines came on lingering concerns over the health of the global economy.

“If we experience an economic slowdown, crude will underperform due to its correlation to growth,” said Hue Frame, portfolio manager at Frame Funds in Sydney.

Most analysts have downgraded their global economic growth forecasts below 3 percent for 2019, with some even fearing a looming recession amid trade disputes and spiralling debt.

For now, however, there is hope that the trade war between Washington and Beijing may be resolved as global markets, including oil, took heart from talks between the two sides this week.

Despite Friday’s price falls, Brent and WTI are set for weekly gains of more than 7 and 8 percent respectively.

Beyond global economics, oil markets are receiving support from supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) aimed at reining in a glut that emerged in the second-half of 2018.

A key reason for the emerging glut was the United States where crude oil production soared by more than 2 million barrels per day (bpd) in 2018 to a record 11.7 million bpd.

Consultancy JBC Energy this week said it was likely that U.S. crude oil production was already “significantly above 12 million bpd” by January 2019.

Given the overall supply and demand balance, Swiss bank Julius Baer said it was “price neutral” in its oil forecast.

“We see the oil market as well balanced into the foreseeable future, as the petro-nations make space for further U.S. shale production growth,” said Norbert Ruecker, head of commodity research at the bank.

Fed Chairman Jerome Powell reiterated on Thursday the U.S. central bank has the ability to be patient on monetary policy given that inflation remains stable. Fed Vice Chair Richard Clarida also struck a dovish tone, underscoring the central bank’s willingness to remain patient on the issue of raising rates. “The Fed Funds Rate is no longer accommodative but neutral, and more importantly, positive in real terms. In line with a more patient Fed, the U.S. dollar’ rise will become gentler,” said Phi

The dollar fell versus its major peers on Friday, as investors grew increasingly confident that the U.S. Federal Reserve may hit the pause button on monetary tightening this year.

Fed Chairman Jerome Powell reiterated on Thursday the U.S. central bank has the ability to be patient on monetary policy given that inflation remains stable. Markets are now pricing in no further rate hikes by the Fed this year.

“The market has almost priced in that the Fed will not be hiking rates any further. To get the dollar weaker, market now has to expect a rate cut…I don’t see that happening,” said Sim Moh Siong, currency strategist at Bank of Singapore.

Sentiment was still slightly cautious in Asian trade on a lack of concrete details from the United States and China on any progress in their trade dispute after a three-day meeting in Beijing. The two sides are more than halfway through a 90-day truce agreed by U.S. President Donald Trump and his Chinese counterpart Xi Jinping.

Traders still remain optimistic that a trade deal between the world’s largest economies will eventually materialize. U.S. Treasury Secretary Steven Mnuchin said late on Thursday that Chinese Vice Premier Liu He will “most likely” visit Washington later in January for trade talks.

Bank of Singapore’s Sim added that currencies such as the Australian dollar, a gauge of risk appetite, and the New Zealand dollar, are likely to see further gains if a U.S.-Sino trade deal is reached.

The Aussie dollar was last at $0.7201, gaining 0.2 percent versus the greenback, while the kiwi firmed 0.44 percent to $0.6808.

The dollar also fell 0.47 percent versus the offshore yuan to 6.7602. The yuan is now at its strongest since late July last year.

The dollar index fell by 0.17 percent to 95.37. The index has fallen around 2.2 percent since mid-December on expectations that a slowdown in growth, both in the United States as well as globally, will restrict the Fed from raising rates in 2019.

In 2018, the greenback outperformed its peers, gaining 4.3 percent as the Fed hiked rates four times on the back of a strong domestic economy, falling unemployment and rising wage pressures. This has caused traders to turn bearish on the dollar.

However, few analysts still forecast a rising dollar for this year.

“The Fed Funds Rate is no longer accommodative but neutral, and more importantly, positive in real terms. In line with a more patient Fed, the U.S. dollar’ rise will become gentler,” said Philip Wee, currency strategist at DBS in a note.

The euro gained 0.2 percent to $1.1519, after losing 0.4 percent of its value in the previous session. The single currency has been pressured by a slew of weaker-than-expected economic data, especially from France and Germany.

The European Central Bank is widely expected to remain accommodative in 2019, which should keep a lid on the single currency.

Elsewhere, sterling traded marginally firmer, fetching $1.2752 in early Asian trade with traders focused on the progress of Brexit.

British Prime Minister Theresa May must win a vote in parliament to get her Brexit deal approved or risk seeing Britain’s exit from the European Union descend into chaos. The vote is now due to take place on Jan. 15. The numbers are not in May’s favor and her chances of winning the vote look extremely slim.

The dollar weakened versus the Canadian dollar by 0.17 percent to C$1.3211. The greenback has lost 3.25 percent against the loonie over the last six sessions, with the commodity-linked currency bolstered by a rebound in oil prices.

Hong Kong’s Hang Seng index extended gains to rise about 2 percent, as of its final hour of trade. The positive moves in China came after the country’s commerce ministry announced that vice ministerial level trade talks with the U.S. would be held on Jan. 7-8. South Korea’s Kospi also recovered from its earlier losses to close 0.83 percent higher at 2,010.25. Australia stocks fell as the benchmark ASX 200 slipped 0.25 percent to close at 5,619.4. National Australia Bank, on the other hand, recov

Asia markets were mostly higher on Friday as developments on the U.S.-China trade front overcame fears of a slowdown in the global economy which resulted in sharp declines in stocks stateside overnight.

The Chinese mainland markets rebounded strongly after an earlier slip. The Shanghai composite bounced about 2.05 percent higher to close at around 2,514.87 and the Shenzhen composite jumped 2.658 percent to finish its trading day at approximately 1,279.49. The Shenzhen component rose 2.756 percent to close at about 7,284.84.

Hong Kong’s Hang Seng index extended gains to rise about 2 percent, as of its final hour of trade.

The positive moves in China came after the country’s commerce ministry announced that vice ministerial level trade talks with the U.S. would be held on Jan. 7-8.

The development on the trade front was also bolstered by positive data from China’s services sector. The Caixin/Markit services purchasing managers’ index jumped to a six-month high of 53.9 in December, rising from 53.8 in the previous month. The figure was significantly higher than the 50.0 mark which separates expansion from contraction.

The data came days after China reported a decline in its factory activity for December.

South Korea’s Kospi also recovered from its earlier losses to close 0.83 percent higher at 2,010.25.

Japan’s Nikkei 225, however, dropped 2.26 percent to close at 19,561.96 while the Topix index fell 1.53 percent to finish the trading day at 1,471.16, with most sectors seeing declines. Shares of Japanese conglomerate Softbank fell 2.89 percent and Fast Retailing, the company behind the Uniqlo chain of apparel stores, dropped 5.45 percent. Stocks in Japan were closed on Wednesday and Thursday for holidays.

Australia stocks fell as the benchmark ASX 200 slipped 0.25 percent to close at 5,619.4.

The heavily-weighted financial subindex declined 0.34 percent as shares of the country’s so-called Big Four banks were mixed; Australia and New Zealand Banking Group slipped 0.37 percent and Westpac saw losses of 0.04 percent. National Australia Bank, on the other hand, recovered from earlier losses to rise 0.21 percent while Commonwealth Bank of Australia was slightly higher.

“For the brave, now would be a good time to be looking at … some of these markets,” Stefan Hofer, a managing director and chief investment strategist at LGT Bank Asia, told CNBC’s “Squawk Box” on Friday. Hofer added that liquidity and trading volumes are “still quite thin at the outset of the year.”

“Fundamentally speaking, I think if we do have a trade deal with China, let’s say, by the middle of 2019, then Asia … will be the place to be in terms of equities,” he said, adding that the ongoing U.S.-China trade war has been “the major overhang that has been a problem” for Asian markets.

The pan-European Stoxx 600 index fell 0.64 percent during early morning trade, with most sectors and all major bourses in the red. Apple blamed a number of factors for the climbdown in guidance, including weakness in China’s economy and disappointing iPhone revenue. Apple suppliers in the continent also faltered, with shares of Austrian chipmaker AMS plunging 19 percent. South Korea’s Kospi slid almost 0.81 percent at the close as domestic Apple suppliers fell, while China’s Hang Seng index drop

The pan-European Stoxx 600 index fell 0.64 percent during early morning trade, with most sectors and all major bourses in the red.

The biggest story for investors on Thursday was Apple Chief Executive Tim Cook’s letter to investors, in which he lowered the tech giant’s first-quarter revenue guidance to $84 billion, down from the $89 billion to $93 billion that had previously been forecast. The firm also lowered gross margin expectations to approximately 38 percent, down from a previously projected 38-38.5 percent.

Apple blamed a number of factors for the climbdown in guidance, including weakness in China’s economy and disappointing iPhone revenue. The news amplified fears of a downturn in global growth, as well as the effects of U.S.-Sino trade tensions on corporate earnings.

Looking at individual stocks, U.K. fashion retailer Next rose to the top of the European benchmark after reporting a jump in Christmas sales in the run-up to the Christmas holiday season. The firm posted a 9.2 percent rise in in-store sales and a 15.2 percent jump in online sales. Shares rose 6 percent.

Asian equities also tumbled Thursday, while U.S. futures pointed to a negative open. South Korea’s Kospi slid almost 0.81 percent at the close as domestic Apple suppliers fell, while China’s Hang Seng index dropped 0.22 percent. Dow futures, meanwhile, indicated a more than 300-point drop at the open, with S&P 500 futures falling 1.4 percent and Nasdaq futures down 2.6 percent.

Another focus for investors was an apparent “flash crash” in foreign exchange markets that saw the Japanese yen soar versus most major currencies within seconds. The U.S. dollar sank 1 percent against the yen, to 107.72.

Stateside, Congress and the White House failed to reach a funding deal Wednesday to end the partial government shutdown. The main source of contention for the two main parties is President Donald Trump’s demand for $5 billion to fund a border wall between the U.S. and Mexico.

Elsewhere, German Economy Minister Peter Altmaier said in an interview published Thursday that the U.K.’s withdrawal from the European Union poses an economic risk, although he added that he expected growth in Germany to continue.

According to a survey released by U.K. industry body the British Chambers of Commerce on Thursday, the percentage of services firms reporting a rise in domestic sales fell to the lowest level in two years in the fourth quarter.

In terms of data, the Swiss SVME Purchasing Managers’ Index (PMI) rose to 57.8 in December, beating expectations for a reading of 57.2. U.K. construction PMI and euro zone money supply figures are due later in the morning.

Sterling slipped on Wednesday, partially reversing some of the gains notched up earlier this week, as strong factory surveys failed to dispel the growing concerns over Brexit negotiations. Lawmakers are set to discuss the agreement again next month, with a vote in the week starting Jan. 14. That is keeping currency traders on edge with implied volatility gauges, a measure of short-term currency fluctuations in sterling elevated. Against the euro, the British currency fell 0.1 percent to 90 pence

Sterling slipped on Wednesday, partially reversing some of the gains notched up earlier this week, as strong factory surveys failed to dispel the growing concerns over Brexit negotiations.

British factories ramped up their stockpiling in December as they prepared for possible border delays when Britain leaves the European Union in less than three months’ time, a survey showed.

“Despite this increase in demand, confidence remains weak as everyone knows that these increased supplies of raw materials, constituent parts and finished goods will eventually run out and supply chain disruption will hurt businesses later down the line,” said Jeremy Thomson-Cook, chief economist at WorldFirst.

Prime Minister Theresa May is struggling to overcome deep opposition to her Brexit plan in her own Conservative Party, raising the risk that no transition period will be provided to ease Britain out of its four-decade-long membership of the EU.

May pulled a vote on her divorce deal last month after admitting that parliament would reject it. Lawmakers are set to discuss the agreement again next month, with a vote in the week starting Jan. 14.

That is keeping currency traders on edge with implied volatility gauges, a measure of short-term currency fluctuations in sterling elevated.

At 1410 GMT, the pound fell more than a percent to $1.2610 against the dollar. It rallied more than a percent in intraday trading on Monday.

Against the euro, the British currency fell 0.1 percent to 90 pence.

In the futures markets, traders stepped up their bearish bets against the British currency, taking net short bets to a two-month high at $4.8 billion.

Stocks in Asia were broadly lower on Thursday after the U.S. Federal Reserve raised interest rates for the fourth time in 2018. China’s central bank decided to keep short-term borrowing rates steady on Thursday,a day after announcing measures to encourage lending to small firms. Meanwhile, South Korea’s Kospi shed 0.9 percent, as shares of LG Electronics declined by 4.13 percent. And in Australia, the ASX 200 fell 1.34 percent to close at 5,505.8, with shares of the country’s so-called Big Four

Stocks in Asia were broadly lower on Thursday after the U.S. Federal Reserve raised interest rates for the fourth time in 2018.

The mainland Chinese markets were mixed on the day, with the Shanghai composite slipping 0.52 percent to close at about 2,536.27 and the Shenzhen composite recovering from earlier losses to end the trading day up by 0.202 percent at around 1,297.10.

China’s central bank decided to keep short-term borrowing rates steady on Thursday,a day after announcing measures to encourage lending to small firms.

Following the People’s Bank of China’s move to spur lending to small businesses, Shanghai-listed shares of major banks declined as Industrial and Commercial Bank of China fell 1.88 percent, Agricultural Bank of China shed 0.57 percent and China Construction Bank dropped 2.14 percent. Financial stocks make up nearly 40 percent of the Shanghai composite.

Hong Kong’s Hang Seng index fell 1.05 percent, as of its final hour of trade, with Hong Kong-listed shares of HSBC declining by around 1 percent.

Meanwhile, Japan’s Nikkei 225 slipped 2.84 percent to close at 20,392.58 while the Topix index declined by 2.51 percent to finish the trading day at 1,517.16. Shares of conglomerate Softbank Group continued to remain under pressure on Thursday as they slipped 4.72 percent, a day after the lackluster public debut of its mobile unit on Wednesday.

Shares of the newly listed Softbank Corp fell as much as 8 percent earlier on Thursday, according to Reuters, before recovering to see gains of 1.09 percent on the day.

Meanwhile, South Korea’s Kospi shed 0.9 percent, as shares of LG Electronics declined by 4.13 percent. John Ko, an analyst at NH Investment and Securities, estimated a 15 percent year-on-year decline in fourth quarter operating profit for LG Electronics, citing weakness in sectors such as its television and smartphone divisions.

And in Australia, the ASX 200 fell 1.34 percent to close at 5,505.8, with shares of the country’s so-called Big Four banks seeing declines. Australia and New Zealand Banking Group fell 1.63 percent, National Australia Bank slipped 0.99 percent, Commonwealth Bank of Australia shed 0.69 percent and Westpac lost 1.07 percent.

The euro currency has slipped in value after the European Central Bank (ECB) trimmed its growth forecasts for this year and next. The ECB’s three-year, 2.6 trillion-euro ($3tn) bond buying program is ending this month, and the central bank has claimed it is still on track to raise rates after the summer of next year. Delivering his prepared remarks to reporters in Frankfurt, ECB President Mario Draghi said 2018 growth in the euro area was expected to be 1.9 percent rather than the 2.0 percent fo

The euro currency has slipped in value after the European Central Bank (ECB) trimmed its growth forecasts for this year and next.

The ECB’s three-year, 2.6 trillion-euro ($3tn) bond buying program is ending this month, and the central bank has claimed it is still on track to raise rates after the summer of next year.

Delivering his prepared remarks to reporters in Frankfurt, ECB President Mario Draghi said 2018 growth in the euro area was expected to be 1.9 percent rather than the 2.0 percent forecast in September.

“The risks surrounding the euro area growth outlook can still be assessed as broadly balanced. However, the balance of risk is moving to the downside owing to the persistence of uncertainties related to geopolitical factors, the threat of protectionism, vulnerabilities in emerging markets and financial market volatility,” Draghi said.

The 2019 GDP (gross domestic product) figure was also trimmed back to 1.7 percent from an earlier forecast of 1.8 percent.

The euro/dollar currency pair was at $1.1375 as Draghi begin speaking and fell to $1.1340 following the data release. On the day, the currency was lower by around 0.25 percent versus the dollar.

For inflation forecasts, Draghi announced that a slight upward revision in his staff projection for 2018 to 1.8 percent, has been offset by a corresponding fall next year.

The pan-European Stoxx 600 was down around 0.6 percent during early afternoon deals, with almost all sectors and major bourses in negative territory. Britain’s FTSE 100 index led the gains, shortly after reports emerged suggesting a crucial Brexit vote could be pulled. Europe’s chemicals stocks led the losses Monday afternoon, down over 1.5 percent. Autos stock — seen as a trade war proxy because of its export-heavy constituents — were also trading more than 1.5 percent lower amid elevated trade

The pan-European Stoxx 600 was down around 0.6 percent during early afternoon deals, with almost all sectors and major bourses in negative territory.

Britain’s FTSE 100 index led the gains, shortly after reports emerged suggesting a crucial Brexit vote could be pulled.

Meanwhile, sterling slipped to one-and-a-half year lows on the news. The U.K. currency was trading at around 1.2665 against the dollar at around 12:05 p.m. London time.

Europe’s chemicals stocks led the losses Monday afternoon, down over 1.5 percent. Germany’s BASF SE was the worst sectoral performer, slipping nearly 5 percent after the company slashed its forecast for profits in 2018 late last week.

Autos stock — seen as a trade war proxy because of its export-heavy constituents — were also trading more than 1.5 percent lower amid elevated trade tensions. Fiat Chrysler slipped almost 3 percent Monday lunchtime.

Looking at individual stocks, Air France KLM rose toward the top of the European benchmark during early afternoon deals. It comes after the airline reported better-than-expected traffic figures for November, prompting shares to rise over 1.6 percent. However, the Paris-listed company is still down around 30 percent year-to-date.

Europe’s construction and material stocks were among the worst performers, down more than 2 percent amid growing trade war concerns. France’s Saint-Gobain led the sectoral losses after J.P. Morgan cut its stock recommendation to “neutral” from “overweight.” Looking at individual stocks, Britain’s Hargreaves Lansdown slumped to the bottom of the European benchmark after Morgan Stanley cut its stock recommendation to “underweight” from “equal-weight.” Meanwhile, U.K.-listed drugmaker Shire was amo

Europe’s construction and material stocks were among the worst performers, down more than 2 percent amid growing trade war concerns. France’s Saint-Gobain led the sectoral losses after J.P. Morgan cut its stock recommendation to “neutral” from “overweight.” Shares of the Paris-listed stock dipped almost 3 percent on the news.

Looking at individual stocks, Britain’s Hargreaves Lansdown slumped to the bottom of the European benchmark after Morgan Stanley cut its stock recommendation to “underweight” from “equal-weight.” Shares of the London-listed firm fell 4 percent Wednesday morning.

Meanwhile, U.K.-listed drugmaker Shire was among the top performers on Britain’s FTSE 100 index during early morning deals. Japan’s Takeda Pharmaceutical secured shareholder approval to complete a £46 billion ($59 billion) takeover of the company Wednesday morning, prompting shares of Shire to jump 2.5 percent.